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Return on Capital for 4 Sectors The case has financial data of some companies drawn from four different industry sectors - Banking, Computers,...

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Return on Capital for 4 Sectors

The case has financial data of some companies drawn from four different industry sectors - Banking, Computers, Construction, and Energy -. 

The data include 'return on capital', 'sales', 'operating margin', and 'debt-to-capital ratio' all pertaining to the same latest 12 months for which data were available for that company.

  • Identify characteristics of four different sectors.
  • Build a model to predict return on capital.
  • Do we need to have four different models for each sector? Justify your answer.
  • For each of the four sectors, give a 95% interval for the expected return on capital for a company with the following annual data: sales of $2 billion, operating margin of 3.5%, and a debt-to-capital ratio of 50%.

BANKSRETURNSALESMARGINDEBTTOCAPITAL

Bank of New York17.2717838.128.5

Bank United11.9143726.724.3

Comerica17.1394838.965.6

Compass Bancshares15.416722726.4

Fifth Third Bancorp16.6412334.846.4

First Tennessee NatI15.1231721.320.1

Firstar13.7680436.617.7

Golden State Bancorp15.9441821.565.8

Golden West FinI14.6359223.817

GreenPoint Financial11.315703614.1

Hibernia14.71414260

M&TBank13.4191030.221.4

Marshall & llsley14.7259424.419

Northern Trust15.3337928.435.7

Old Kent Financial16.619912621.9

PNC Financial Services1575483229.5

SouthTrust12.938022426.1

Synovus FinI19.7185827.35.1

UnionBanCal16.5308531.414.6

Washington Mutual13.81519724.739.6

Wells Fargo11.92453238.950.7

Zions Bancorp7.7184523.519.3

COMPUTERSRETURNSALESMARGINDEBTTOCAPITAL

Agilent Technologies22.410773140

Altera32.4124641.70

Amer Power Conversion21.2145922.0

Analog Devices36.8257835.334

Applied Materials42.2956432.57.4

Atmel16.4182730.828.1

Cisco Systems15.52152927.30

Dell Computer38.8300169.67.8

EMC24.98127310.2

Gateway26.694619.80.1

Intel28.53323646.31.5

Jabil Circuit2535588.41.9

KLA-Tencor21.8176026.70

Micron Technology26.5733644.811.8

Palm10.112827.80

Sanmina14.1391213.939

SCI Systems12.587075.835.9

Solectron14.614138746.6

Sun Microsystems30.51762119.614.7

Tech Data1319890222.6

Tektronix41.3111812.313.2

Teradyne40.42804270.54

Texas Instruments25.51140629.98.4

Xilinx35.8137336.80

CONSTRUCTIONRETURNSALESMARGINDEBTTOCAPITAL

Carlisle Cos15.7175213.934.3

Granite Construction14.113689.813.7

DR Norton12.336549.358

Kaufman & Broad Home12.139109.258.4

Lennar14.7395510.759.7

Martin Marietta Mats10.3135426.439.3

Masco14.3715518.438.3

MDC Holdings21.4167412.328.4

Mueller Industries15122715.914.2

NVR40.8219511.931.5

Pulte11.540528.937.6

Standard Pacific13.7119810.752.9

Stanley Works16.927731418.9

Toll Brothers11164214.753.5

URS8.721769.862.9

Vulcan Materials11.8246723.527.1

Del Webb8.2204810.364.8

ENERGYRETURNSALESMARGINDEBTTOCAPITAL

Allegheny Energy7.8352426.447.9

Apache12.5200679.832.3

BJ Services9.8155519.110.6

BPAmoco19.413145015.417.9

Chevron16.6439572316

Cinergy7.7713016.742.3

Conoco17.5301436.7

Consol Energy20.4203617.155.9

Duke Energy7.84010410.437.7

Dynegy18.4240743.739.4

Enron8.1710113.240.6

Exelon8.6562033.956.8

ExxonMobil14.919695614.77.9

FPL Group8.6674433.132.8

Halliburton11.912424818.2

Kerr-McGee17.2376054.745

KeySpan8.9412323.139.9

MDU Resources8.7162117.740.5

Montana Power10.5105523.524

Murphy Oil17.5317220.522.1

Noble Affiliates13.5119742.436

OGE Energy7.9289418.748.6

Phillips Petgroleum14.91941421.647

PPL10.1530126.454

Progress Energy8.3366140.838.7

Reliant Energy8.32357611.937.8

Royal Dutch Petroleum17.912914719.85.7

Scana7.2283942.547.4

Smith International725399.322.8

Sunoco13.4117916.434.3

TECO Energy9218931.240.4

Tosco16.7212875.941.5

Valero Energy14.5131884.735.8

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